China-US statement sparks global optimism: Hong Kong and US stocks surge, gold drops to nearly one-month low

At 15:00 Beijing time on Monday, the Ministry of Commerce of China issued a joint statement on the US-China Geneva Economic and Trade Talks.

This significant statement indicated that both sides committed to taking a series of measures before May 14, 2025, including revising and rescinding additional tariffs imposed on each other's goods, as well as suspending or rescinding non-tariff countermeasures. Additionally, both sides will establish mechanisms to continue consultations on economic and trade relations, possibly in the US, China, or a third country.

The spokesperson for the Ministry of Commerce of China stated that the US committed to rescinding a total of 91% of the additional tariffs imposed on Chinese goods under Executive Order 14259 of April 8, 2025, and Executive Order 14266 of April 9, 2025, and revising the 34% reciprocal tariffs imposed on Chinese goods under Executive Order 14257 of April 2, 2025. Among these, the imposition of 24% of the tariffs will be suspended for 90 days, while the remaining 10% will be retained. Correspondingly, China will rescind a total of 91% of the counter-tariffs imposed on US goods. For the 34% counter-tariffs imposed in response to US reciprocal tariffs, the imposition of 24% of the tariffs will be suspended for 90 days, while the remaining 10% will be retained. China will also suspend or rescind non-tariff countermeasures against the US accordingly.

Upon the release of this news, global financial markets immediately became volatile. The Hong Kong stock market surged significantly, US stock index futures also rose rapidly, while gold prices fell sharply. In the foreign exchange market, the US dollar index surged, and the offshore RMB also strengthened significantly against the US dollar.

Global assets responded swiftly.

After the joint statement on the US-China Geneva Economic and Trade Talks was issued at 15:00 Beijing time, the gains in the Hong Kong stock market expanded rapidly. By the close of trading, the Hang Seng Index closed up 2.98%, and the Hang Seng Tech Index soared 5.16%, with Sunny Optical Technology, BYD Electronic, XPeng Motors, and others leading the gains.

The US stock market was also in high spirits. As of press time, the S&P 500 index futures surged 2.51%, the Nasdaq 100 index futures soared 3.37%, and the Dow Jones index futures rose 1.89%.

The VIX index futures, known as the "fear index," plunged 7.39%, indicating a significant easing of people's concerns.

The price of gold, a safe-haven asset that had previously surged due to the US-China trade war, fell sharply. As of press time, gold futures fell 3.51% intraday to $3,226.49 per ounce, breaking below the previous low of the phase on May 1 and hitting a new low since April 14.

As market sentiment eased, the US dollar rebounded significantly. As of press time, the US dollar index rose 1.26% intraday, hitting a new high since April 10. The offshore RMB also strengthened, rising 0.39% against the US dollar to 7.2108 RMB per US dollar as of press time.

The yield on the 10-year US Treasury note rose by 1.44% during the day, hitting a new high since April 14.

Market participants: Chinese stocks and the RMB are set to rise.

Market participants and economists have given positive assessments of the joint statement issued at the China-US Geneva Economic and Trade Talks.

ARNE PETIMEZAS, Research Director at AFS Group in Amsterdam, said, "The US has made such a dramatic 180-degree turn on the tariff issue, which is quite surprising...The market should rebound as a result."

WILLIAM XIN, Chairman of Shanghai Chunshan Pujiang Investment Management Co., Ltd., told the media, "The outcome far exceeded market expectations...Now, there is more certainty. Both the Chinese stock market and the RMB are set to rise over a period of time."